REG - Jardine StrategicJardine Matheson Hdg - Half Yearly Report <Origin Href="QuoteRef">JARD.SI</Origin> <Origin Href="QuoteRef">JSH.SI</Origin> - Part 1
RNS Number : 0032OJardine Strategic Hldgs Ltd01 August 2014
To: Business Editor
1st August 2014
For immediate release
The following announcement was issued today to a Regulatory Information Service approved by the Financial Conduct Authority in the United Kingdom.
Jardine Strategic Holdings Limited
Half-Yearly Results for the Six Months ended 30th June 2014
Highlights
Underlying earnings down 5%
Interim dividend up 7%
Astra net profit up 11% in rupiah, but lower contribution in US dollars
Hongkong Land's result affected by lack of Singapore residential completions although commercial property performed well
Satisfactory profit growth from Jardine Matheson interests
"The Company's first-half results were affected by a weaker rupiah exchange rate, fewer residential project completions and increased margin pressures in some of the Group's businesses. The full-year profit is expected to remain broadly in line with last year."
Sir Henry Keswick, Chairman
1st August 2014
Results
(unaudited)
Six months ended 30th June
2014
US$m
2013
US$m
Change
%
Revenue together with revenue of Jardine Matheson,associates and joint ventures*
30,782
31,359
-2
Underlying profit attributable to shareholders
775
819
-5
Profit attributable to shareholders
876
860
+2
Shareholders' funds#
22,859
22,028
+4
US$
US$
%
Underlying earnings per share
1.28
1.34
-5
Earnings per share
1.44
1.40
+3
Net asset value per share#
59.61
50.34
+18
US
US
%
Interim dividend per share
8.00
7.50
+7
* Includes 100% of revenue of Jardine Matheson, associates and joint ventures.
The Group uses 'underlying profit' in its internal financial reporting to distinguish between ongoing business performance and non-trading items, as more fully described in note 9 to the condensed financial statements. Management considers this to be a key measure which provides additional information to enhance understanding of the Group's underlying business performance.
# At 30th June 2014 and 31st December 2013, respectively.Net asset value per share is calculated on market value basis, details of which are set out in note 15 to the condensed financial statements.
The interim dividend of US8.00per share will be payable on 15th October 2014 to shareholders on the register of members at the close of business on 22nd August 2014 and will be available in cash with a scrip alternative. The ex-dividend date will be on 20th August 2014, and the share registers will be closed from 25th to 29th August 2014, inclusive.
Jardine Strategic Holdings Limited
Half-Yearly Results for the Six Months ended 30th June 2014
Overview
Mixed performances from across the Group led to a decline in underlying earnings for the Group in the first half of the year. Strong profits from Astra in rupiah terms were more than offset by a weaker exchange rate. Fewer residential project completions resulted in a lower contribution from Hongkong Land despite higher commercial property earnings. Satisfactory growth was seen in Jardine Matheson, while the results from Dairy Farm were in line with last year.
Results
Jardine Strategic's underlying profit for the first six months of 2014 was US$775 million, 5% below the same period in 2013. Underlying earnings per share were also 5% lower at US$1.28. The revenue of the Group, including 100% of the revenue of Jardine Matheson, associates and joint ventures, was US$30.8 billion, compared to US$31.4 billion in the first half of 2013.
Non-trading items in the first half produced a gain of US$101 million, primarily due to an increase in investment property values in Hongkong Land, and compares with a non-trading gain of US$41 million in the first half of 2013. As a result, the Group's profit attributable to shareholders was US$876 million for the six months under review, compared with US$860 million in 2013.
The Board has declared an interim dividend of US8.00 per share, up 7%.
Business Performances
Within Jardine Matheson's directly held interests, Jardine Pacific saw an increase in profit for the period. While there was a significant reduction in the contribution from its transport services businesses, following the move last year of a major customer of Hactl to its own dedicated facility at Hong Kong International Airport, the effect was largely offset by improved results in the group's Restaurant operations and a return to profit in JOS. Jardine Motors performed better with all its operations producing enhanced results, particularly in mainland China where a profit was recorded following improvements in both sales and margins. JLT enjoyed a satisfactory first half with good performances across the group, continuing the strong organic revenue growth of recent years.
In April 2014, the Company completed aUS$731 million investment in shares and convertible bonds representing up to a 20% interest in Zhongsheng Group, which is one of mainland China's leading motor dealership groups. Zhongsheng represents a range of major international marques and operates some 180 outlets across 15 provinces and regions.
Hongkong Land's commercial property operations in Hong Kong and Singapore continued to trade well during the first six months of the year. Satisfactory progress was made in several development projects, including a luxury retail complex at Wangfujing in Beijing, an office tower in central Jakarta and a mixed-use development in Phnom Penh. The absence of residential project completions in Singapore, however, led to an overall decline in earnings for the period. Further residential completions are expected in the second half of the year, which will benefit the full-year result.
Dairy Farm achieved higher sales in all divisions, although its underlying profit was marginally lower. Its Health and Beauty, Home Furnishings and Restaurants divisions each achieved improved profits, but its Food division saw lower earnings due to sustained margin pressure. To support its long-term growth objectives, Dairy Farm is investing significantly in existing stores, in modernizing its IT infrastructure and supply chain, and in building its human resource capability. The group is focused on Greater China and Southeast Asia, having recently disposed of its interests in its Indian operations to its joint venture partner.
While the performance of a majority of Mandarin Oriental's hotels was stable during the period, challenging conditions in certain markets led to a lower profit. Mandarin Oriental continues to develop its portfolio, which now consists of 27 hotels in operation and 17 under development. Three new hotels are to be opened within the next 18 months, in Marrakech, Milan and Beijing. The group has also agreed to invest some US$170 million over a number of years to expand its Munich property.
Jardine Cycle & Carriage's first-half results reflected generally strong trading performances from Astra's operations, which led to an 11% improvement in its rupiah earnings, although its contribution on consolidation was hit by a 17% weaker exchange rate. The group's other motor interests produced a higher profit overall.
Astra's businesses faced a number of challenges, not least heightened competition in the car market eroding margins and the effect of subdued coal prices. Improved results were seen from its agribusiness and contract mining operations, although these were partially offset by a decline in earnings from car sales. Its financial services interests recorded lower underlying earnings, although benefited from a non-trading gain on the establishment of Astra Aviva Life. Progress is being made with a luxury residential joint-venture development alongside Hongkong Land in Jakarta's Central Business District, and initial sales launches are expected to begin during the third quarter.
During the period, the Company's 2.9% shareholding in Tata Power was sold for a total consideration of some US$120 million.
Corporate Developments
Following shareholder approval at a Special General Meeting held in April, the transfer of the Company's listing on the Main Market of the London Stock Exchange to the standard listing category was completed on 27th May 2014.
Outlook
The Company's first-half results were affected by a weaker rupiah exchange rate, fewer residential project completions and increased margin pressures in some of the Group's businesses. The full-year profit is expected to remain broadly in line with last year.
Sir Henry Keswick
Chairman
1st August 2014
Operating Review
Jardine Matheson
Jardine Matheson reported an underlying profit for the first six months of 2014 of US$739 million, 2% lower than the same period in 2013. Non-trading items in the first half produced a gain of US$79 million, giving a profit attributable to shareholders of US$818 million, compared with US$784 million in the first half of 2013. Shareholders' funds rose modestly to US$19.0 billion during the first six months of the year.
Jardine Pacific
Jardine Pacific's underlying profit for the first half of 2014 rose 6% to US$47 million. The value of the group's investment property portfolio remained unchanged. Jardine Schindler recorded a profit in line with last year and further growth in its maintenance portfolio. Gammon's earnings suffered from delays in major projects, although some improvement is expected in the second half, and JEC produced a higher profit. Earnings of the group's transport services businesses declined following the move last year of a major customer of Hactl to its own dedicated facility at Hong Kong International Airport. The results of Jardine Restaurants benefited from its recent acquisition of the KFC franchise in Hong Kong and a lower loss in its KFC business in Taiwan. JOS achieved increased revenues and a small profit following a difficult year in 2013.
Jardine Motors
Jardine Motors produced a much improved underlying profit of US$52 million in the first half, compared to US$20 million in 2013. Zung Fu performed well in Hong Kong and Macau with higher deliveries of Mercedes-Benz cars at better margins reflecting a favourable mix of models following new product launches. While the market remained challenging in mainland China, growth in new car sales and enhanced margins enabled a profit to be recorded for the first half. The group's United Kingdom operations achieved a good result with vehicles sales up as trading conditions improved.
During the first half, Jardine Strategic invested US$731 million for a minority interest in Hong Kong-listed Zhongsheng Group, which is one of mainland China's leading motor dealership groups. The investment represents an initial 11% equity interest together with convertible bonds, which entitles the Group's interest to increase to 20%.
Jardine Lloyd Thompson
Jardine Lloyd Thompson's revenue for the period was equivalent to US$937 million, up 15% in its reporting currency, reflecting organic growth and acquisitions offset in part by a 7% negative foreign exchange rate impact. The contribution to Group profits rose by 23%. These good results are set against a marked decline towards the end of the period in the insurance and reinsurance rating environment coupled with the continued strength of sterling.
The company's specialist Risk and Insurance business produced a 15% improvement in revenues, of which 5% was organic, with strong performances from its Asian and Latin American operations. The underlying trading profit was up 15%, reflecting the benefit of the Towers Watson Re acquisition. The Employee Benefits business achieved revenue growth of 13%, of which 12% was organic, with its international operations once again making an increased contribution. Its underlying trading profit rose 23%.
Hongkong Land
Hongkong Land produced an underlying profit in the first half in line with expectations of US$433 million, compared with US$519 million in 2013. The contribution from its commercial property was higher, but the absence of residential project completions in Singapore led to an overall decline in earnings. A US$130 million uplift in the value of investment properties produced a profit attributable to shareholders of US$563 million, compared with a US$79 million increase and an attributable profit of US$598 million in 2013.
While sentiment in the Hong Kong office leasing market was cautious, rental reversions in the group's portfolio were positive overall and vacancy at the end of June 2014 was 6.0%, compared with 5.0% at the end of 2013. The retail space remained fully let and rental reversions were positive. There was some evidence of increasing demand in the Singapore office leasing market, where the group's office portfolio saw a steady performance and occupancy levels. In Jakarta, its 50%-owned office portfolio was 96% let. Hongkong Land is making satisfactory progress with several development projects, including a luxury retail complex at Wangfujing in Beijing, an office tower in central Jakarta and a mixed-use development in Phnom Penh.
The contribution from residential activities was significantly lower as no projects were completed in Singapore in the first half of 2014, compared with two large projects completed in the first six months of 2013. Positive sales activity did, however, allow US$34 million of writedowns previously made to be reversed. MCL Land expects to complete two projects in Singapore in the second half of the year, with additional completions due in 2015. In Hong Kong, further sales at its Serenade project were completed. In Chongqing, sales completions continued at its 50%-owned Bamboo Grove project, although there was a decline in the group's contracted sales across its residential projects in mainland China resulting from general market uncertainty and a less liquid mortgage market. In Indonesia, work is progressing well at the group's two joint venture residential projects, where initial launches are planned for the second half of the year.
Dairy Farm
Dairy Farm's sales for the period, including 100% of associates and joint ventures, rose 5% to US$6.3 billion. Underlying net profit was marginally lower at US$224 million. The profit attributable to shareholders of US$234 million includes gains arising from the disposal of properties, and compares with US$229 million in 2013. The group's financial position remains healthy with net cash of US$568 million at 30th June 2014.
The group's Health and Beauty, Home Furnishings, and Restaurants divisions each achieved solid growth in sales and earnings. Despite improved sales in the Food division, profits were down due to sustained margin pressure arising from competitive market conditions and increased costs. Its Food banners in Hong Kong had a satisfactory first half and Malaysia produced higher sales and profits, but lower earnings were recorded in Singapore and Indonesia. Less favourable exchange rates also affected the group's results on translation into US dollars.
In May 2014, Maxim's announced that it had entered into a new franchise relationship with The Cheesecake Factory to bring this US casual dining concept to Asia. In July 2014, Dairy Farm sold its 49% interest in Foodworld and 50% interest in Health and Glow in India to its joint venture partner. Also in July, Dairy Farm agreed to increase its shareholding in Rustan Supercenters, Inc. in the Philippines to 66% with the purchase of an additional 16% interest. The construction of the first IKEA store in Indonesia is progressing well.
Mandarin Oriental
Mandarin Oriental's underlying profit for the period was US$46 million, including US$9 million of branding fees, which compares with a profit US$54 million in 2013 that benefited from a US$7 million gain recognized on the acquisition of the freehold rights of its Paris hotel. Profit attributable to shareholders was US$46 million, compared with US$57 million in the first half of 2013.
Occupancy was stable at Mandarin Oriental's two wholly-owned Hong Kong hotels, while elsewhere in Asia, Bangkok was adversely affected by ongoing political uncertainty and there were weaker performances in Jakarta and Manila. In Europe, further progress was made in the Paris hotel and an improvement in Geneva offset softer demand in London and Munich. The overall performance in North America was impacted by lower demand in Washington D.C.
Hotels were recently opened in Taipei and Bodrum, while a further three new hotels in Marrakech, Milan and Beijing are due over the next 18 months. New management contracts have been announced for Bali in 2017 and Manila in 2020, the latter replacing the group's existing property which is due to close later this year.
Jardine Cycle & Carriage
Jardine Cycle & Carriage reported an underlying profit down 9% at US$413 million, while profit attributable to shareholders at US$433 million was 4% lower, after a net gain of US$20 million primarily relating to the recognition of negative goodwill arising on the establishment of Astra Aviva Life. Astra contributed US$381 million to the group's underlying profit, which was 12% lower due primarily to the rupiah exchange rate being on average 17% weaker than in the first half of 2013. The contribution from the group's other motor interests grew 50% to US$37 million.
Earnings from the Singapore motor operations were up 30% following increased contribution from Mercedes-Benz passenger cars, after-sales, Kia passenger cars and taxis and used cars. In Malaysia, Cycle & Carriage Bintang's earnings improved following good demand for the newer Mercedes-Benz models. In Indonesia, Tunas Ridean's contribution was down 25% in the face of competitive pressures in the car market and reduced gains on the sale of ex-rental vehicles. In Vietnam, Truong Hai Auto Corporation performed well due to the strong sales, good margins and lower financing costs. The new operations in Myanmar incurred a small loss.
Astra
Astra reported a net profit equivalent to US$837 million under Indonesian accounting standards, 11% up on its reporting currency. Improved results from its agribusiness and contract mining operations were partially offset by a decline in earnings from its automotive businesses as discounting continued to impact on margins in the car sector.
The wholesale market for cars grew by 7%, while Astra's car sales rose by 4% to 334,000 units resulting in its market share decreasing slightly from 53% to 52%. The wholesale market for motorcycles increased by 7%, and Astra Honda Motor's sales were up by 11% to 2.6 million units, producing a market share of 62% up from 60%. Astra's component business made a lower contribution following the reduction in its shareholding in Astra Otoparts from 96% to 80% in 2013, while net income also fell by 11% on lower manufacturing margins despite higher sales volumes.
Net income from Astra's financial services operations increased by 15% to US$211 million with the inclusion of a US$38 million non-trading gain arising on the establishment of Astra Aviva Life. The amount financed through its automotive-focused consumer finance operations rose 11% to US$2.6 billion, while the amount financed in the heavy equipment sector declined by 23% to US$168 million following lower sales. Astra sold a 25% interest in Astra Sedaya Finance to Bank Permata, Astra's 45%-held joint venture, for a cash consideration of US$187 million, with the resulting US$89 million gain recorded directly in equity. Bank Permata reported net income down 2% to US$68 million. Group insurance company, Asuransi Astra Buana, saw reduced profits as growth in premiums was offset by a lower contribution from investment earnings following the recognition of one-off gains in 2013.
United Tractors, which is 60%-owned, reported net income up 42% to US$280 million. In construction machinery, a marginal fall in net revenue reflected a 10% decline in sales of Komatsu heavy equipment offset by growth in parts and service revenue. The contract mining operations of subsidiary, Pamapersada Nusantara, benefited from improved coal volumes on lower stripping ratios. Net revenue grew 12% as contract coal production rose 20% to 60 million tonnes, although contract overburden removal was 3% lower at 401 million bank cubic metres. United Tractors' mining subsidiaries reported an increase in net revenue of 46%, with coal sales 51% higher at 3.4 million tonnes, although the average coal sale prices declined by 7%. Rises in fuel costs also reduced the gross profit margins.
Astra Agro Lestari, which is 80%-held, saw net income grow 91% to US$117 million. Average crude palm oil prices achieved were up 32%, although crude palm oil sales were reduced by 10% to 675,000 tonnes, primarily due to the commencement of operations of Astra Agro Lestari's refinery in West Sulawesi.
Net income from infrastructure and logistics fell by 23%. The 79%-owned Tangerang-Merak toll road reported 4% growth in traffic volumes with 14% higher average tariffs. Serasi Autoraya's revenue improved, but the benefit was offset by an increase in operating costs resulting in a 25% decline in net income. Within information technology, Astra Graphia reported net income of US$9 million, up 53%.
Anandamaya Residences, a 60%-held luxury residential development located in Jakarta's Central Business District, is expected to commence initial sales launches during the third quarter. This high-end development, in joint venture with Hongkong Land, consists of approximately 500 apartment units, with completion expected in 2018.
Jardine Strategic Holdings Limited
Consolidated Profit and Loss Account
(unaudited)
Six months ended 30th June
Year ended 31st December
2014
2013
2013
Underlying
business
performance
US$m
Non-trading
items
US$m
Total
US$m
Underlying
business
performance
US$m
Non-trading
items
US$m
Total
US$m
Underlying
business
performance
US$m
Non-trading
items
US$m
Total
US$m
Revenue (note 2)
15,743
-
15,743
16,741
-
16,741
32,666
-
32,666
Net operating costs (note 3)
(14,076)
36
(14,040)
(15,041)
1
(15,040)
(29,239)
(31)
(29,270)
Change in fair value of investment
properties
-
16
16
-
(43)
(43)
-
(62)
(62)
Operating profit
1,667
52
1,719
1,700
(42)
1,658
3,427
(93)
3,334
Net financing charges
- financing charges
(113)
-
(113)
(126)
-
(126)
(242)
-
(242)
- financing income
86
-
86
57
-
57
139
-
139
(27)
-
(27)
(69)
-
(69)
(103)
-
(103)
Share of results of Jardine Matheson
(note 4)
102
(5)
97
80
(2)
78
173
(5)
168
Share of results of associates and joint
ventures (note 5)
- before change in fair value of
investment properties
369
38
407
511
3
514
934
(23)
911
- change in fair value of investment
properties
-
123
123
-
131
131
-
352
352
369
161
530
511
134
645
934
329
1,263
Profit before tax
2,111
208
2,319
2,222
90
2,312
4,431
231
4,662
Tax (note 6)
(382)
(7)
(389)
(369)
(6)
(375)
(805)
(7)
(812)
Profit after tax
1,729
201
1,930
1,853
84
1,937
3,626
224
3,850
Attributable to:
Shareholders of the Company
(notes 7 & 9)
775
101
876
819
41
860
1,616
84
1,700
Non-controlling interests
954
100
1,054
1,034
43
1,077
2,010
140
2,150
1,729
201
1,930
1,853
84
1,937
3,626
224
3,850
US$
US$
US$
US$
US$
US$
Earnings per share (note 8)
- basic
1.28
1.44
1.34
1.40
2.65
2.79
- diluted
1.28
1.44
1.34
1.40
2.65
2.79
Jardine Strategic Holdings Limited
Consolidated Statement of Comprehensive Income
(unaudited)
Six months ended
30th June
Year ended
31st
December
2014
US$m
2013
US$m
2013
US$m
Profit for the period
1,930
1,937
3,850
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit plans
(3)
(8)
41
Net revaluation surplus before transfer to investment properties
- intangible assets
6
-
2
- tangible assets
-
-
1
Tax on items that will not be reclassified
1
1
(9)
4
(7)
35
Share of other comprehensive (expense)/
income of Jardine Matheson
(6)
1
27
Share of other comprehensive income/
(expense) of associates and joint ventures
2
(7)
1
-
(13)
63
Items that may be reclassified subsequently to profit or loss:
Net exchange translation differences
- net gain/(loss) arising during the period
109
(264)
(1,794)
- transfer to profit and loss
-
-
(1)
109
(264)
(1,795)
Revaluation of other investments
- net loss arising during the period
(3)
(54)
(28)
- transfer to profit and loss
-
(12)
(11)
(3)
(66)
(39)
Impairment of other investments transfer to profit and loss
-
-
55
Cash flow hedges
- net (loss)/gain arising during the period
(66)
19
(40)
- transfer to profit and loss
45
15
77
(21)
34
37
Tax relating to items that may be reclassified
6
(7)
(8)
Share of other comprehensive income/
(expense) of Jardine Matheson
7
(23)
6
Share of other comprehensive income/
(expense) of associates and joint ventures
47
(157)
(641)
145
(483)
(2,385)
Other comprehensive income/(expense) for the period, net of tax
145
(496)
(2,322)
Total comprehensive income for the period
2,075
1,441
1,528
Attributable to:
Shareholders of the Company
926
630
973
Non-controlling interests
1,149
811
555
2,075
1,441
1,528
Jardine Strategic Holdings Limited
Consolidated Balance Sheet
(unaudited)
At 30th June
At 31st
December
2014
US$m
2013
US$m
2013
US$m
Assets
Intangible assets
2,228
2,382
2,088
Tangible assets
6,551
6,926
6,426
Investment properties
23,815
23,579
23,688
Plantations
897
1,032
856
Investment in Jardine Matheson
1,920
1,550
1,734
Associates and joint ventures
8,058
7,553
7,749
Other investments
1,346
1,116
1,096
Non-current debtors
3,398
2,885
2,792
Deferred tax assets
258
257
226
Pension assets
25
15
30
Non-current assets
48,496
47,295
46,685
Properties for sale
3,211
2,677
2,670
Stocks and work in progress
2,738
2,612
2,330
Current debtors
5,797
6,414
5,269
Current investments
15
30
17
Current tax assets
131
169
129
Bank balances and other liquid funds
- non-financial services companies
4,025
4,016
4,617
- financial services companies
323
297
284
4,348
4,313
4,901
16,240
16,215
15,316
Non-current assets classified as held for sale
4
4
7
Current assets
16,244
16,219
15,323
Total assets
64,740
63,514
62,008
Equity
Share capital
56
56
56
Share premium and capital reserves
1,377
1,373
1,370
Revenue and other reserves
23,274
22,160
22,440
Own shares held
(1,848)
(1,834)
(1,838)
Shareholders' funds
22,859
21,755
22,028
Non-controlling interests
21,516
21,407
20,862
Total equity
44,375
43,162
42,890
Liabilities
Long-term borrowings
- non-financial services companies
5,363
4,997
4,552
- financial services companies
1,744
1,998
1,674
7,107
6,995
6,226
Deferred tax liabilities
695
764
707
Pension liabilities
226
282
213
Non-current creditors
421
406
384
Non-current provisions
129
134
116
Non-current liabilities
8,578
8,581
7,646
Current creditors
7,662
6,860
6,742
Current borrowings
- non-financial services companies
1,684
2,369
2,385
- financial services companies
2,096
2,242
2,079
3,780
4,611
4,464
Current tax liabilities
289
255
210
Current provisions
56
45
56
Current liabilities
11,787
11,771
11,472
Total liabilities
20,365
20,352
19,118
Total equity and liabilities
64,740
63,514
62,008
Jardine Strategic Holdings Limited
Consolidated Statement of Changes in Equity
Share
capital
US$m
Share
premium
US$m
Capital
reserves
US$m
Revenue
reserves
US$m
Contributed
surplus
US$m
Asset
revaluation
reserves
US$m
Hedging
reserves
US$m
Exchange
reserves
US$m
Own
shares
held
US$m
Attributable to shareholders of the Company
US$m
Attributable
to non-controlling interests
US$m
Total
equity
US$m
Six months ended 30th June 2014 (unaudited)
At 1st January 2014
56
1,199
171
22,665
304
214
1
(744)
(1,838)
22,028
20,862
42,890
Total comprehensive income
-
-
-
863
-
2
(7)
68
-
926
1,149
2,075
Dividends paid by the Company (note 10)
-
-
-
(109)
-
-
-
-
-
(109)
-
(109)
Dividends paid to non-controlling interests
-
-
-
-
-
-
-
-
-
-
(635)
(635)
Employee share option schemes
-
-
8
-
-
-
-
-
-
8
1
9
Scrip issued in lieu of dividends
-
-
-
7
-
-
-
-
-
7
-
7
Increase in own shares held
-
-
-
-
-
-
-
-
(10)
(10)
-
(10)
Change in interests in subsidiaries
-
-
-
10
-
-
-
-
-
10
139
149
Change in interests in associates and joint ventures
-
-
-
(1)
-
-
-
-
-
(1)
-
(1)
Transfer
-
-
(1)
1
-
-
-
-
-
-
-
-
At 30th June 2014
56
1,199
178
23,436
304
216
(6)
(676)
(1,848)
22,859
21,516
44,375
Six months ended 30th June 2013 (unaudited)
At 1st January 2013
56
1,199
167
21,047
304
213
(23)
105
(1,727)
21,341
21,036
42,377
Total comprehensive income
-
-
-
818
-
-
11
(199)
-
630
811
1,441
Dividends paid by the Company (note 10)
-
-
-
(104)
-
-
-
-
-
(104)
-
(104)
Dividends paid to non-controlling interests
-
-
-
-
-
-
-
-
-
-
(708)
(708)
Employee share option schemes
-
-
8
-
-
-
-
-
-
8
-
8
Scrip issued in lieu of dividends
-
-
-
4
-
-
-
-
-
4
-
4
Increase in own shares held
-
-
-
-
-
-
-
-
(107)
(107)
-
(107)
Subsidiaries acquired
-
-
-
-
-
-
-
-
-
-
68
68
Capital contribution from non-controlling interests
-
-
-
-
-
-
-
-
-
-
76
76
Change in interests in subsidiaries
-
-
-
(16)
-
-
-
-
-
(16)
124
108
Change in interests in associates and joint ventures
-
-
-
(1)
-
-
-
-
-
(1)
-
(1)
At 30th June 2013
56
1,199
175
21,748
304
213
(12)
(94)
(1,834)
21,755
21,407
43,162
Year ended 31st December 2013
At 1st January 2013
56
1,199
167
21,047
304
213
(23)
105
(1,727)
21,341
21,036
42,377
Total comprehensive income
-
-
-
1,797
-
1
24
(849)
-
973
555
1,528
Dividends paid by the Company
-
-
-
(150)
-
-
-
-
-
(150)
-
(150)
Dividends paid to non-controlling interests
-
-
-
-
-
-
-
-
-
-
(951)
(951)
Employee share option schemes
-
-
14
-
-
-
-
-
-
14
3
17
Scrip issued in lieu of dividends
-
-
-
6
-
-
-
-
-
6
-
6
Increase in own shares held
-
-
-
-
-
-
-
-
(111)
(111)
-
(111)
Subsidiaries acquired
-
-
-
-
-
-
-
-
-
-
52
52
Subsidiaries disposed of
-
-
-
-
-
-
-
-
-
-
(1)
(1)
Capital contribution from non-controlling interests
-
-
-
-
-
-
-
-
-
-
75
75
Change in interests in subsidiaries
-
-
-
(44)
-
-
-
-
-
(44)
93
49
Change in interests in associates and joint ventures
-
-
-
(1)
-
-
-
-
-
(1)
-
(1)
Transfer
-
-
(10)
10
-
-
-
-
-
-
-
-
At 31st December 2013
56
1,199
171
22,665
304
214
1
(744)
(1,838)
22,028
20,862
42,890
Total comprehensive income for the six months ended 30th June 2014 included in revenue reserves comprises profit attributable to shareholders of the Company of US$876 million (2013: US$860 million) and net fair value loss on other investments of US$6 million (2013: US$40 million). Cumulative net fair value gain on other investments amounted to US$305 million.
Total comprehensive income for the year ended 31st December 2013 included in revenue reserves comprises profit attributable to shareholders of the Company of US$1,700 million and net fair value gain on other investments (net of impairment and transfer to profit and loss) of US$51 million. Cumulative net fair value gain on other investments amounted to US$311 million.
Contributed surplus represents the excess in value of shares acquired in consideration for the issue of the Company's shares, over the nominal value of those shares issued. Under the Bye-Laws of the Company, the contributed surplus is distributable.
Jardine Strategic Holdings Limited
Consolidated Cash Flow Statement
(unaudited)
Six months ended
30th June
Year ended 31st December
2014
US$m
2013
US$m
2013
US$m
Operating activities
Operating profit
1,718
1,658
3,334
Change in fair value of investment properties
(16)
43
62
Depreciation and amortization
463
513
992
Other non-cash items
45
94
298
Increase in working capital
(743)
(554)
(358)
Interest received
93
56
133
Interest and other financing charges paid
(129)
(140)
(253)
Tax paid
(351)
(481)
(933)
1,080
1,189
3,275
Dividends from associates and joint ventures
350
299
533
Cash flows from operating activities
1,430
1,488
3,808
Investing activities
Purchase of subsidiaries (note 12(a))
-
(79)
(74)
Purchase of associates and joint ventures (note 12(b))
(121)
(79)
(488)
Purchase of shares and convertible bonds in Zhongsheng
(731)
-
-
Purchase of other investments (note 12(c))
(35)
(92)
(106)
Purchase of intangible assets
(156)
(159)
(294)
Purchase of tangible assets
(541)
(919)
(1,397)
Additions to investment properties
(104)
(80)
(223)
Additions to plantations
(27)
(36)
(65)
Advance to associates, joint ventures and others (note 12(d))
(7)
(94)
(6)
Advance and repayment from associates, joint ventures
and others (note12(e))
42
72
219
Sale of subsidiaries
-
4
14
Sale of other investments (note 12(f))
138
94
109
Sale of intangible assets
-
1
8
Sale of tangible assets
40
15
72
Sale of investment properties
-
-
1
Cash flows from investing activities
(1,502)
(1,352)
(2,230)
Financing activities
Capital contribution from non-controlling interests
-
76
75
Advance from non-controlling interests
-
-
1
Change in interests in subsidiaries (note 12(g))
154
132
73
Drawdown of borrowings
4,829
5,311
8,492
Repayment of borrowings
(4,708)
(4,407)
(7,798)
Dividends paid by the Company
(195)
(186)
(268)
Dividends paid to non-controlling interests
(635)
(708)
(951)
Cash flows from financing activities
(555)
218
(376)
Net (decrease)/increase in cash and cash equivalents
(627)
354
1,202
Cash and cash equivalents at beginning of period
4,895
3,918
3,918
Effect of exchange rate changes
48
(23)
(225)
Cash and cash equivalents at end of period
4,316
4,249
4,895
Jardine Strategic Holdings Limited
Notes to Condensed Financial Statements
1. Accounting Policies and Basis of Preparation
The condensed financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting'. The condensed financial statements have been prepared on a going concern basis. The condensed financial statements have not been audited or reviewed by the Group's auditors pursuant to the UK Auditing Practices Board guidance on the review of interim financial information.
The following amendments and interpretation which are effective in the current accounting period and relevant to the Group's operations are adopted in 2014:
Amendments to IAS 32
Offsetting Financial Assets and Financial Liabilities
Amendments to IAS 36
Recoverable Amount Disclosures for Non-Financial Assets
Amendments to IAS 39
Novation of Derivatives and Continuation of Hedge Accounting
IFRIC 21
Levies
Amendments to IAS 32 'Offsetting Financial Assets and Financial Liabilities' are made to the application guidance in IAS 32 and clarify some of the requirements for offsetting financial assets and financial liabilities on the balance sheet. Specifically, the amendments clarify the meaning of 'currently has a legally enforceable right of offset' and 'simultaneous realization and settlement'.
Amendments to IAS 36 'Recoverable Amount Disclosures for Non-Financial Assets' set out the changes to the disclosures when recoverable amount is determined based on fair value less costs of disposal. The key amendments are (a) to remove the requirement to disclose recoverable amount when a cash generating unit (CGU) contains goodwill or indefinite lived intangible assets but there has been no impairment, (b) to require disclosure of the recoverable amount of an asset or CGU when an impairment loss has been recognized or reversed, and (c) to require detailed disclosure of how the fair value less costs of disposal has been measured when an impairment loss has been recognized or reversed.
Amendments to IAS 39 'Novation of Derivatives and Continuation of Hedge Accounting' provide relief from discontinuing hedge accounting when novation of a hedging instrument to a central counterparty meets specified criteria.
IFRIC 21 'Levies' sets out the accounting for an obligation to pay a levy that is not income tax. The interpretation clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy.
There have been no changes to the accounting policies described in the 2013 annual financial statements upon the adoption of the above amendments and interpretation to existing standards. The adoption of these amendments and interpretation do not have any significant impact on the results or financial position of the Group.
The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
2. Revenue
Six months ended 30th June
Gross revenue
Revenue
2014
US$m
2013
US$m
2014
US$m
2013
US$m
By business:
Jardine Matheson
6,310
5,430
-
-
Hongkong Land
1,069
2,039
602
912
Dairy Farm
6,312
6,033
5,299
5,102
Mandarin Oriental
518
509
341
327
Jardine Cycle & Carriage
1,731
1,565
808
701
Astra
15,196
16,205
8,694
9,702
Intersegment transactions
(354)
(422)
(1)
(3)
30,782
31,359
15,743
16,741
Gross revenue comprises revenue together with 100% of revenue from Jardine Matheson, associates and joint ventures.
3. Net Operating Costs
Six months ended 30th June
2014
US$m
2013
US$m
Cost of sales
(11,797)
(12,822)
Other operating income
265
254
Selling and distribution costs
(1,648)
(1,603)
Administration expenses
(825)
(857)
Other operating expenses
(35)
(12)
(14,040)
(15,040)
Net operating costs included the following gains/(losses) from non-trading items:
Sale of property interests
11
1
Sale of other investments
16
-
Sale of business
10
-
Fair value gain on convertible component of Zhongsheng
bonds
4
-
Expenses relating to transfer of listing segment of group companies' shares
(4)
-
Other
(1)
-
36
1
4. Share of Results of Jardine Matheson
Six months ended 30th June
2014
US$m
2013
US$m
By business:
Jardine Pacific
26
24
Jardine Motors
28
11
Jardine Lloyd Thompson
26
21
Corporate and other interests
17
22
97
78
Share of results of Jardine Matheson included the following losses from non-trading items:
Restructuring of businesses
(4)
(2)
Expenses relating to transfer of listing segment of group
companies' shares
(1)
-
(5)
(2)
Results are shown after tax and non-controlling interests in Jardine Matheson.
5. Share of Results of Associates and Joint Ventures
Six months ended 30th June
2014
US$m
2013
US$m
By business:
Hongkong Land
199
286
Dairy Farm
22
22
Mandarin Oriental
7
13
Jardine Cycle & Carriage
20
13
Astra
282
311
530
645
Share of results of associates and joint ventures included the following gains/(losses) from non-trading items:
Increase in fair value of investment properties
123
131
Reversal of asset impairment
-
3
Negative goodwill on acquisition of business
38
-
161
134
Results are shown after tax and non-controlling interests in the associates and joint ventures.
6. Tax
Six months ended 30th June
2014
US$m
2013
US$m
Tax charged to profit and loss is analyzed as follows:
Current tax
(429)
(426)
Deferred tax
40
51
(389)
(375)
Greater China
(106)
(94)
Southeast Asia
(278)
(278)
United Kingdom
(1)
(1)
Rest of the world
(4)
(2)
(389)
(375)
Tax relating to components of other comprehensive income or expense is analyzed as follows:
Remeasurements of defined benefit plans
1
1
Cash flow hedges
6
(7)
7
(6)
Tax on profits has been calculated at rates of taxation prevailing in the territories in which the Group operates.
Share of tax charge of Jardine Matheson of US$14 million and credit of US$2 million (2013: US$7 million and US$1 million) are included in share of results of Jardine Matheson and share of other comprehensive income of Jardine Matheson, respectively.
Share of tax charge of associates and joint ventures of US$124 million and credit of US$1 million (2013: US$158 million and US$1 million) are included in share of results of associates and joint ventures and share of other comprehensive income of associates and joint ventures, respectively.
7. Profit Attributable to Shareholders
Six months ended 30th June
2014
US$m
2013
US$m
Operating segments:
Jardine Matheson
102
80
Hongkong Land
216
260
Dairy Farm
174
177
Mandarin Oriental
34
39
Jardine Cycle & Carriage
27
18
Astra
279
314
832
888
Corporate and other interests
(57)
(69)
Underlying profit attributable to shareholders*
775
819
Increase in fair value of investment properties
66
40
Other non-trading items
35
1
Profit attributable to shareholders
876
860
* Underlying profit attributable to shareholders is the measure of profit adopted by the Group in accordance with IFRS 8 'Operating Segments'.
8. Earnings per Share
Basic earnings per share are calculated on profit attributable to shareholders of US$876 million(2013: US$860 million) and on the weighted average number of 607 million (2013: 612 million) shares in issue during the period.
Diluted earnings per share are calculated on profit attributable to shareholders of US$875 million (2013: US$859 million), which is after adjusting for the effects of the conversion of dilutive potential ordinary shares of Jardine Matheson, subsidiaries, associates or joint ventures, and on the weighted average number of 607 million (2013: 612 million) shares in issue during the period.
The weighted average number of shares is arrived at as follows:
Ordinary shares
in millions
2014
2013
Weighted average number of shares in issue
1,120
1,120
Company's share of shares held by Jardine Matheson
(513)
(508)
Weighted average number of shares for earnings per
share calculation
607
612
Additional basic and diluted earnings per share are also calculated based on underlying profit attributable to shareholders. A reconciliation of earnings is set out below:
Six months ended 30th June
2014
2013
US$m
Basic earnings per share
US$
Diluted earnings per share
US$
US$m
Basic earnings per share
US$
Diluted earnings per share
US$
Profit attributable to shareholders
876
1.44
1.44
860
1.40
1.40
Non-trading items (note 9)
(101)
(41)
Underlying profit attributable to shareholders
775
1.28
1.28
819
1.34
1.34
9. Non-trading items
Non-trading items are separately identified to provide greater understanding of the Group's underlying business performance. Items classified as non-trading items include fair value gains or losses on revaluation of investment properties and plantations; gains and losses arising from the sale of businesses, investments and properties; impairment of non-depreciable intangible assets and other investments; provisions for the closure of businesses; acquisition-related costs in business combinations; and other credits and charges of a non-recurring nature that require inclusion in order to provide additional insight into underlying business performance.
Six months ended 30th June
2014
US$m
2013
US$m
By business:
Jardine Matheson
(5)
(2)
Hongkong Land
65
40
Dairy Farm
8
1
Mandarin Oriental
-
2
Jardine Cycle & Carriage
(1)
-
Astra
16
-
Corporate and other interests
18
-
101
41
An analysis of non-trading items after interest, tax and non-controlling interests is set out below:
Increase in fair value of investment properties
- Hongkong Land
66
40
Reversal of asset impairment
-
2
Sale of property interests
8
1
Sale of other investments
16
-
Sale of business
2
-
Restructuring of businesses
(4)
(2)
Fair value gain on convertible component of Zhongsheng bonds
4
-
Expenses relating to transfer of listing segment of group companies' shares
(4)
-
Negative goodwill on acquisition of business
14
-
Other
(1)
-
101
41
10. Dividends
Six months ended 30th June
2014
US$m
2013
US$m
Final dividend in respect of 2013 of US18.00
(2012: US17.00) per share
202
190
Company's share of dividends paid on the shares
held by Jardine Matheson
(93)
(86)
109
104
An interim dividend in respect of 2014 of US8.00 (2013: US7.50) per share amounting to a total of US$89 million (2013: US$84 million) is declared by the Board. The net amount after deducting the Company's share of the dividends payable on the shares held by Jardine Matheson of US$41 million (2013: US$38 million) will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2014.
11. Financial Instruments
Financial instruments by category
The fair values of financial assets and financial liabilities, together with carrying amounts at 30th June 2014 and 31st December 2013 are as follows:
Loans and
receivable
US$m
Derivatives
US$m
Available-
for-sale
US$m
Fair value through profit or
loss
US$m
Other financial liabilities at amortized cost
US$m
Total
carrying
amount
US$m
Fair
value
US$m
30th June 2014
Assets
Other investments
-
-
1,361
-
-
1,361
1,361
Debtors
8,029
183
-
22
-
8,234
8,006
Bank balances and
other liquid funds
4,348
-
-
-
-
4,348
4,348
12,377
183
1,361
22
-
13,943
13,715
Liabilities
Borrowings
(excluding finance
lease liabilities)
-
-
-
-
(10,785)
(10,785)
(10,802)
Finance lease
liabilities
-
-
-
-
(102)
(102)
(102)
Trade and other
payables excluding
non-financial
liabilities
-
(58)
-
(66)
(6,051)
(6,175)
(6,175)
-
(58)
-
(66)
(16,938)
(17,062)
(17,079)
31st December 2013
Assets
Other investments
-
-
1,113
-
-
1,113
1,113
Debtors
6,966
294
-
-
-
7,260
6,855
Bank balances and
other liquid funds
4,901
-
-
-
-
4,901
4,901
11,867
294
1,113
-
-
13,274
12,869
Liabilities
Borrowings
(excluding finance
lease liabilities)
-
-
-
-
(10,567)
(10,567)
(10,480)
Finance lease
liabilities
-
-
-
-
(123)
(123)
(123)
Trade and other
payables excluding
non-financial
liabilities
-
(58)
-
(66)
(5,497)
(5,621)
(5,621)
-
(58)
-
(66)
(16,187)
(16,311)
(16,224)
Fair value estimation
(i) Financial instruments that are measured at fair value
For financial instruments that are measured at fair value in the balance sheet, the corresponding fair value measurements are disclosed by level of the following fair value measurement hierarchy:
(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities ('quoted prices in active markets')
The fair value of listed securities, which are classified as available-for-sale, is based on quoted prices in active markets at the balance sheet date. The quoted market price used for listed investments held by the Group is the current bid price.
(b) Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly ('observable current market transactions')
The fair values of derivative financial instruments are determined using rates quoted by the Group's bankers at the balance sheet date. The rates for interest rate swaps and caps, cross-currency swaps, forward foreign exchange contracts and credit default swaps are calculated by reference to market interest rates and foreign exchange rates, and for the convertible component of convertible bonds held reference is also made to the quoted prices of the underlying shares.
The fair values of unlisted investments, which are classified as available-for-sale and mainly include club and school debentures, are determined using prices quoted by brokers at the balance sheet date.
(c) Inputs for assets or liabilities that are not based on observable market data ('unobservable inputs')
The fair value of other unlisted investments, which are classified as available-for-sale, is determined using valuation techniques by reference to observable current market transactions (including price-to-earnings and price-to-book ratios of listed securities of entities engaged in similar industries) or the market prices of the underlying investments with certain degree of entity specific estimates.
There were no changes in valuation techniques during the periods.
The table below analyzes financial instruments carried at fair value at 30th June 2014 and 31st December 2013, by the levels in the fair value measurement hierarchy:
Quoted
prices in active markets
US$m
Observable current market transactions
US$m
Unobservable inputs
US$m
Total
US$m
30th June 2014
Assets
Available-for-sale financial assets
- listed securities
1,176
-
-
1,176
- unlisted investments
-
8
177
185
1,176
8
177
1,361
Derivative designated at fair value
- through other comprehensive income
-
183
-
183
- through profit or loss
-
22
-
22
1,176
213
177
1,566
Liabilities
Contingent consideration payable
-
-
(66)
(66)
Derivative designated at fair value
- through other comprehensive income
-
(58)
-
(58)
-
(58)
(66)
(124)
31st December 2013
Assets
Available-for-sale financial assets
- listed securities
943
-
-
943
- unlisted investments
-
9
161
170
943
9
161
1,113
Derivative designated at fair value
- through other comprehensive income
-
294
-
294
943
303
161
1,407
Liabilities
Contingent consideration payable
-
-
(66)
(66)
Derivative designated at fair value
- through other comprehensive income
-
(58)
-
(58)
-
(58)
(66)
(124)
There were no transfers among the three categories during the periods.
Movement of financial instruments which are valued based on unobservable inputs during the six months ended 30th June 2014 and 2013 are as follows:
Available-for-sale financial assets
US$m
Contingent consideration payable
US$m
At 1st January 2014
161
66
Exchange differences
1
-
Additions
1
-
Net change in fair value during the period included in
other comprehensive income
14
-
At 30th June 2014
177
66
At 1st January 2013
134
66
Exchange differences
(1)
-
Additions
13
-
Net change in fair value during the period included in
other comprehensive income
13
-
At 30th June 2013
159
66
The contingent consideration payable arose from Astra's acquisition of a 60% interest in PT Duta Nurcahya in 2012 and represents the fair value of service fee payable for mining services to be provided by the vendor.
(ii) Financial instruments that are not measured at fair value
The fair values of current debtors, bank balances and other liquid funds, current creditors and current borrowings are assumed to approximate their carrying amounts due to the short-term maturities of these assets and liabilities.
The fair values of long-term borrowings are based on market prices or are estimated using the expected future payments discounted at market interest rates.
12. Notes to Consolidated Cash Flow Statement
(a) Purchase of subsidiaries
Six months ended 30th June
2014
Fair
value
US$m
2013
Fair
value
US$m
Intangible assets
-
66
Tangible assets
1
86
Associates and joint ventures
-
10
Current assets
3
82
Non-current assets
-
1
Deferred tax liabilities
-
(7)
Pension liabilities
-
(5)
Current liabilities
(3)
(64)
Fair value of identifiable net assets acquired
1
169
Adjustment for non-controlling interests
-
(68)
Goodwill
2
16
Total consideration
3
117
Fair value of associates and joint ventures
(1)
-
Cash and cash equivalents of subsidiaries acquired
(2)
(38)
Net cash outflow
-
79
For the subsidiaries acquired during the first half of 2013, the fair value of the identifiable assets and liabilities at the acquisition dates as included in the comparative figures was provisional. The fair value was finalized between the second half of 2013 and early 2014. As the difference between the provisional and the finalized fair value was not material, the comparative figures have not been adjusted.
Net cash outflow for the six months ended 30th June 2013 included US$45 million and US$31 million for Astra's acquisition of a 100% interest in PT Pelabuhan Penajam Banua Taka, a port business in Indonesia, in January 2013, and a 51% interest in PT Pakoakuina, a producer of wheel rims for both motor cars and motorcycles, in April 2013, respectively.
None of the goodwill is expected to be deductible for tax purposes.
The Group acquired a subsidiary in January 2014. Revenue and loss after tax since acquisition in respect of the subsidiary amounted to US$6 million and US$1 million, respectively.
(b) Purchase of associates and joint ventures for the six months ended 30th June 2014 included US$35 million for Hongkong Land's investments in the Philippines and Indonesia, and US$57 million and US$25 million for Astra's subscription for PT Bank Permata's rights issue and capital injection into PT Aisin, respectively.
Purchase for the six months ended 30th June 2013 comprised US$18 million for Dairy Farm's acquisition of a 30% interest in Jutaria Gemiland in Malaysia and US$51 million and US$10 million for Astra's capital injection into PT Isuzu Astra Motor Indonesia and PT TD Automotive Compressor Indonesia, respectively.
(c) Purchase of other investments for the six months ended 30th June 2014 and 2013 mainly included acquisition of securities by Astra.
(d) Advance to associates, joint ventures and others for the six months ended 30th June 2014 and 2013 comprised Hongkong Land's loans to its property joint ventures.
(e) Advance and repayment from associates, joint ventures and others for the six months ended 30th June 2014 and 2013 comprised advance and repayment from Hongkong Land's property joint ventures.
(f) Sale of other investments for the six months ended 30th June 2014 comprised US$119 million for the Company's sale of Tata Power and US$19 million for Astra's sale of securities.
Sale for the six months ended 30th June 2013 comprised Astra's sale of securities.
(g) Change in interests in subsidiaries
Six months ended 30th June
2014
US$m
2013
US$m
Increase in attributable interests
- Jardine Cycle & Carriage
33
96
- other
-
56
Decrease in attributable interests
- PT Astra Sedaya Finance
(187)
-
- PT Astra Otoparts
-
(284)
(154)
(132)
Increase in attributable interests in other subsidiaries for the six months ended 30th June 2013 included US$56 million for Astra's acquisition of an additional 15% interest in PT Asmin Bara Bronang, increasing its controlling interest to 75%.
13. Capital Commitments and Contingent Liabilities
Total capital commitments at 30th June 2014 and 31st December 2013 amounted to US$2,275 million and US$2,065 million, respectively.
Various Group companies are involved in litigation arising in the ordinary course of their respective businesses. Having reviewed outstanding claims and taking into account legal advice received, the Directors are of the opinion that adequate provisions have been made in the condensed financial statements.
14. Related Party Transactions
In accordance with the Bye-laws of the Company, Jardine Matheson Limited, a wholly-owned subsidiary of Jardine Matheson Holdings Limited ('Jardine Matheson'), has been appointed General Manager of the Company under a General Manager Agreement. With effect from 1st January 2008, Jardine Matheson Limited has sub-delegated certain of its responsibilities under the agreement to a fellow subsidiary. Total fees payable for services provided to the Company for the six months ended 30th June 2014 amounted to US$68 million (2013: US$71 million).
In the normal course of business the Group undertakes a variety of transactions with Jardine Matheson, and with certain of its associates and joint ventures.
The most significant of such transactions relate to the purchases of motor vehicles and spare parts from the Group's associates and joint ventures in Indonesia including PT Toyota-Astra Motor, PT Astra Honda Motor and PT Astra Daihatsu Motor. Total cost of motor vehicles and spare parts purchased for the six months ended 30th June 2014 amounted to US$3,799 million (2013: US$4,361 million). The Group also sells motor vehicles and spare parts to its associates and joint ventures in Indonesia including PT Astra Honda Motor, PT Astra Daihatsu Motor and PT Tunas Ridean. Total revenue from sales of motor vehicles and spare parts for the six months ended 30th June 2014 amounted to US$586 million (2013: US$622 million).
PT Bank Permata provides banking services to the Group. The Group's deposits with PT Bank Permata at 30th June 2014 amounted to US$443 million (2013: US$568 million).
During the second quarter of 2014, Astra completed the disposal of a 25% interest in PT Astra Sedaya Finance to PT Bank Permata for a cash consideration of US$187 million, with the resulting gain of US$89 million recorded directly in equity.
There were no other related party transactions that might be considered to have a material effect on the financial position or performance of the Group that were entered into or changed during the first six months of the current financial year.
Amounts of outstanding balances with Jardine Matheson, associates and joint ventures are included in debtors and creditors, as appropriate.
15. Market Value Basis Net Assets
At 30th June
2014
US$m
At 31st December
2013
US$m
Jardine Matheson
4,336
3,344
Hongkong Land
7,848
6,942
Dairy Farm
11,189
9,971
Mandarin Oriental
1,404
1,231
Jardine Cycle & Carriage
9,275
7,406
Other holdings
1,256
623
35,308
29,517
Jardine Strategic Corporate
739
1,054
36,047
30,571
US$
US$
Net asset value per share (US$)
59.61
50.34
'Market value basis net assets' are calculated based on the market price of the Company's holdings for listed companies, with the exception of the holding in Jardine Matheson which has been calculated by reference to the market value of US$22,780 million (2013: US$19,762 million) less the Company's share of the market value of Jardine Matheson's interest in the Company. For unlisted companies a Directors' valuation has been used.
Net asset value per share is calculated on 'market value basis net assets' of US$36,047 million (2013: US$30,571 million) and on 605 million (2013: 607 million) shares outstanding at the period end which excludes the Company's share of the shares held by Jardine Matheson of 516 million (2013: 513 million) shares.
Jardine Strategic Holdings Limited
Principal Risks and Uncertainties
The Board has overall responsibility for risk management and internal control. The following have been identified previously as the areas of principal risk and uncertainty facing the Company, and they remain relevant in the second half of the year.
Economic Risk
Commercial Risk and Financial Risk
Concessions, Franchises and Key Contracts
Regulatory and Political Risk
Terrorism, Pandemic and Natural Disasters
For greater detail, please refer to page 110 of the Company's Annual Report for 2013, a copy of which is available on the Company's website www.jardines.com.
Responsibility Statement
The Directors of the Company confirm to the best of their knowledge that:
(a) the condensed financial statements have been prepared in accordance with IAS 34; and
(b) the interim management report includes a fair review of all information required to be disclosed by the Disclosure and Transparency Rules 4.2.7 and 4.2.8 issued by the Financial Conduct Authority in the United Kingdom.
For and on behalf of the Board
Ben Keswick
Adam Keswick
Directors
1st August 2014
The interim dividend of US8.00 per share will be payable on 15th October 2014 to shareholders on the register of members at the close of business on 22nd August 2014, and will be available in cash with a scrip alternative. The ex-dividend date will be on 20th August 2014, and the share registers will be closed from 25th to 29th August 2014, inclusive. Shareholders will receive their cash dividends in United States dollars, unless they are registered on the Jersey branch register where they will have the option to elect for sterling. These shareholders may make new currency elections for the 2014 interim dividend by notifying the United Kingdom transfer agent in writing by 26th September 2014. The sterling equivalent of dividends declared in United States dollars will be calculated by reference to a rate prevailing on 30th September 2014. Shareholders holding their shares through The Central Depository (Pte) Limited ('CDP') in Singapore will receive United States dollars unless they elect, through CDP, to receive Singapore dollars or the scrip alternative.
Jardine Strategic
Jardine Strategic is a holding company which takes long-term strategic investments in multinational businesses, particularly those with an Asian focus, and in other high quality companies with existing or potential links with the Group. Its principal attributable interests are in Jardine Matheson 56%, Hongkong Land 50%, Dairy Farm 78%, Mandarin Oriental 73% and Jardine Cycle & Carriage 74%, which in turn has a 50% interest in Astra. It also has a minority interest in Zhongsheng Group. Jardine Strategic is 83%-held by Jardine Matheson.
Jardine Strategic Holdings Limited is incorporated in Bermuda and has a standard listing on the London Stock Exchange as its primary listing, with secondary listings in Bermuda and Singapore. The Company's interests are managed from Hong Kong by Jardine Matheson Limited.
- end -
For further information, please contact:
Jardine Matheson Limited
James Riley
(852) 2843 8229
GolinHarris
Kennes Young
(852) 2501 7987
As permitted by the Disclosure and Transparency Rules of the Financial Conduct Authority in the United Kingdom, the Company will not be posting a printed version of the Half-Yearly Results announcement to shareholders. The Half-Yearly Results announcement will remain available on the Company's website, www.jardines.com, together with other Group announcements.
This information is provided by RNSThe company news service from the London Stock ExchangeENDIR DFLBBZVFFBBQ
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